Mongolia Meets Investors; Thanksgiving Slows Issuance

(Corrects spelling of name in third paragraph of story
published Nov. 22)

Mongolia is meeting investors from
today to discuss a possible dollar-denominated bond sale, as
closed markets in the U.S. for Thanksgiving prompted Asian
issuers to pause. Bond risk fell.

The North Asian country, which was the world’s fastest-
growing economy last year, hired five banks to arrange the
meetings, a person familiar with the matter said yesterday.
Asia-Pacific dollar note sales this week total $1.8 billion,
compared with $3.9 billion last week, according to data compiled
by Bloomberg. Asia debt risk is poised to close at the lowest
level in more than two weeks, according to prices from Westpac
Banking Corp. (WBC) and data provider CMA.

Mongolia, an exporter of coking coal, is seeking to raise
as much as $5 billion from bonds and loans for rail and power
projects, Vice Economy Minister Chuluunbat Ochirbat said last
month. The extra yield Asian companies pay over Treasuries to
sell dollar debt fell for the first time in more than two weeks
yesterday, according to HSBC Holdings Plc indexes.

Mongolia is “in a pretty sweet spot, if you’re looking at
it from a resource standpoint,” said Brayan Lai, a desk analyst
in emerging market credit trading at Jefferies Group Inc. in
Singapore. Mongolia will likely be flexible on timing given less
constraints around required funding, he said.

Bond Risk

Kookmin Bank will also consider a capital markets
transaction after meetings in Singapore, Hong Kong and London
next week, a person with knowledge of those details said.

Financial markets in the U.S. are closed today for the
Thanksgiving holiday.

The Markit iTraxx Asia index of 40 investment-grade
borrowers outside Japan slid two basis points to 118 as of 8:11
a.m. in Hong Kong, Westpac prices show. The gauge is on track
for its lowest close since Nov. 7, according to CMA, which is
owned by McGraw-Hill Cos. and compiles prices quoted by dealers
in the privately negotiated market.

The Markit iTraxx Australia index fell one basis point to
139 as of 11:23 a.m. in Sydney, according to Credit Agricole SA. (ACA)
The benchmark is poised for its fourth consecutive day of
decreases, according to CMA.

The Markit iTraxx Japan index dropped two basis points to
176 as of 9:11 a.m. in Tokyo, Westpac prices show. The measure
is set for a sixth day of declines and the lowest close since
Sept. 14, according to data provider CMA.

Credit-default swap indexes are benchmarks for insuring
bonds against default and traders use them to speculate on
credit quality. A drop signals improving perceptions of
creditworthiness, while an increase suggests the opposite.

The swap contracts pay the buyer face value in exchange for
the underlying securities if a borrower fails to meet its debt
agreements.